The European Commission suggested revisions in a report released on Friday to boost the competitiveness of the bloc’s banking sector, setting the political framework for what could become a significant revamp of EU banking laws to liberate billions of euros in capital. Despite a decade of development under the Banking Union, Europe’s banking sector remains divided by national borders. The Commission claims that this affects the banking sector’s ability to help firms and consumers throughout the EU.
The research suggests measures to stimulate cross-border banking, simplify supervision requirements, and strengthen EU capital market integration through closer ties with the Savings and Investments Union. It follows the Commission’s year-long campaign to simplify laws, which Brussels claims would not result in deregulation, even if the measures seek to roll down rules formerly implemented by the European Union.
According to the Commission, reducing these restrictions might help fund the bloc’s estimated €1.2 trillion annual investment needs, which include clean technology, defense, and artificial intelligence.
The ideas would limit national discretion as financial regulations become increasingly harmonised at the EU level. National regulators may have less control over the capital and liquidity held by local subsidiaries, as well as less ability to veto or impose limitations on cross-border mergers and acquisitions.
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